March 5, 1934 |
Tel Aviv, Mandatory Palestine
|Nationality||United States, Israel|
|Institutions||Princeton University 1993â€“
University of California, Berkeley 1986â€“93
University of British Columbia 1978â€“86
Center for Advanced Study in the Behavioral Sciences 1972â€“73
Hebrew University of Jerusalem 1961â€“77
|Alma mater||University of California, Berkeley Ph.D, 1961
Hebrew University B.A., 1954
|Thesis||An analytical model of the semantic differential (1962)|
|Doctoral advisor||Susan M. Ervin-Tripp|
|Doctoral students||Eldar Shafir, Avishai Henik|
|Known for||Cognitive biases
|Notable awards||APA Lifetime Achievement Award (2007)
Nobel Memorial Prize in Economic Sciences (2002)
Tufts University Leontief Prize (2010)
APS Distinguished Scientific Contribution Award (1982)
University of Louisville Grawemeyer Award (2003)
We are very influenced by completely automatic things that we have no control over, and we don't know we're doing it.
One emphasis of my research has been on the question of how people spend their time. Time is the ultimate finite resource, or course, so the question of how people spend it would seem to be important.
If owning stocks is a long-term project for you, following their changes constantly is a very, very bad idea. It's the worst possible thing you can do, because people are so sensitive to short-term losses. If you count your money every day, you'll be miserable.
It's not a case of: 'Read this book and then you'll think differently. I've written this book, and I don't think differently.
Negotiations over a shrinking pie are especially difficult because they require an allocation of losses. People tend to be much more easygoing when they bargain over an expanding pie.
Friends are sometimes a big help when they share your feelings. In the context of decisions, the friends who will serve you best are those who understand your feelings but are not overly impressed by them.
When you analyze happiness, it turns out that the way you spend your time is extremely important.
We're blind to our blindness. We have very little idea of how little we know. We're not designed to know how little we know.
All of us roughly know what memory is. I mean, memory is sort of the storage of the past. It's the storage of our personal experiences. It's a very big deal.
So your emotional state really has a lot to do with what you're thinking about and what you're paying attention to.
Most of the time, we think fast. And most of the time we're really expert at what we're doing, and most of the time, what we do is right.
The idea that you can ask one question and it makes the point – well, that wasn't how psychology was done at the time.
I enjoy being active, but I look forward to the day when I can retire to the Internet.
It's nonsense to say money doesn't buy happiness, but people exaggerate the extent to which more money can buy more happiness.
We know that the French are very different from the Americans in their satisfaction with life. They're much less satisfied. Americans are pretty high up there, while the French are quite low – the world champions in life satisfaction are actually the Danes.
The average investor's return is significantly lower than market indices due primarily to market timing.
In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.
The experiencing self lives its life continuously. It has moments of experience, one after the other.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
Mental effort, I would argue, is relatively rare. Most of the time we coast.
Adaptation seems to be, to a substantial extent, a process of reallocating your attention.
If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That's the 'halo effect.' Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.
If individuals are rational, there is no need to protect them against their own choices.
People should be conscious of the large contribution made by anything that gets people together easily in the reduction of loneliness and emotional well-being.
Nothing in life is as important as you think it is while you are thinking about it.
Nothing in life is quite as important as you think it is while you're thinking about it.
We have no reason to expect the quality of intuition to improve with the importance of the problem. Perhaps the contrary: high-stake problems are likely to involve powerful emotions and strong impulses to action.
Poverty is clearly one source of emotional suffering, but there are others, like loneliness. A policy to reduce the loneliness of the elderly would certainly reduce suffering.
People talk of the new economy and of reinventing themselves in the workplace, and in that sense most of us are less secure.
Many ideas happen to us. We have intuition, we have feeling, we have emotion, all of that happens, we don't decide to do it. We don't control it.
It's very easy for trusted companies to mislead naive customers, and life insurance companies are trusted.
For many people, commuting is the worst part of the day, and policies that can make commuting shorter and more convenient would be a straightforward way to reduce minor but widespread suffering.
The experiencing self lives in the moment; it is the one that answers the question, 'Does it hurt?' or 'What were you thinking about just now?' The remembering self is the one that answers questions about the overall evaluation of episodes or periods of one's life, such as a stay in the hospital or the years since one left college.
Psychologists really aim to be scientists, white-coat stuff, with elaborate statistics, running experiments.
Intuitive diagnosis is reliable when people have a lot of relevant feedback. But people are very often willing to make intuitive diagnoses even when they're very likely to be wrong.
Alternative descriptions of the same reality evoke different emotions and different associations.
People's mood is really determined primarily by their genetic make-up and personality, and in the second place by their immediate context, and only in the third and fourth place by worries and concerns and other things like that.
If you think in terms of major losses, because losses loom much larger than gains – that's a very well-established finding – you tend to be very risk-averse. When you think in terms of wealth, you tend to be much less risk-averse.
When you look at the books about well-being, you see one word – it's happiness. People do not distinguish.
True intuitive expertise is learned from prolonged experience with good feedback on mistakes.
Experienced happiness refers to your feelings, to how happy you are as you live your life. In contrast, the satisfaction of the remembering self refers to your feelings when you think about your life.
The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.
When people evaluate their life, they compare themselves to a standard of what a successful life is, and it turns out that standard tends to be universal: People in Togo and Denmark have the same idea of what a good life is, and a lot of that has to do with money and material prosperity.
There are domains in which expertise is not possible. Stock picking is a good example. And in long-term political strategic forecasting, it's been shown that experts are just not better than a dice-throwing monkey.
Political columnists and sports pundits are rewarded for being overconfident.
Divorced women, compared to married women, are less satisfied with their lives, which is not surprising. But they're actually more cheerful, when you look at the average mood they're in in the course of the day.
People are very complex. And for a psychologist, you get fascinated by the complexity of human beings, and that is what I have lived with, you know, in my career all of my life, is the complexity of human beings.
It's a wonderful thing to be optimistic. It keeps you healthy and it keeps you resilient.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them.
By their very nature, heuristic shortcuts will produce biases, and that is true for both humans and artificial intelligence, but the heuristics of AI are not necessarily the human ones.
It doesn't take many observations to think you've spotted a trend, and it's probably not a trend at all.
We don't see very far in the future, we are very focused on one idea at a time, one problem at a time, and all these are incompatible with rationality as economic theory assumes it.
There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.
People like leaders who look like they are dominant, optimistic, friendly to their friends, and quick on the trigger when it comes to enemies. They like boldness and despise the appearance of timidity and protracted doubt.
We're generally overconfident in our opinions and our impressions and judgments.
The brains of humans contain a mechanism that is designed to give priority to bad news.
We have associations to things. We have, you know, we have associations to tables and to – and to dogs and to cats and to Harvard professors, and that's the way the mind works. It's an association machine.
Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders – not average people. They got to where they are by seeking challenges and taking risks.
Doubting what you see is a very odd experience. And doubting what you remember is a little less odd than doubting what you see. But it's also a pretty odd experience, because some memories come with a very compelling sense of truth about them, and that happens to be the case even for memories that are not true.
Clearly, the decision-making that we rely on in society is fallible. It's highly fallible, and we should know that.
There is a huge wave of interest in happiness among researchers. There is a lot of happiness coaching. Everybody would like to make people happier.
Most of the moments of our life – and I calculated, you know, the psychological present is said to be about three seconds long; that means that, you know, in a life there are about 600 million of them; in a month, there are about 600,000 – most of them don't leave a trace.
Yes, there is a burden of financial insecurity. I don't think you find it in mood. Income is correlated with life satisfaction, so maybe you do find it in life satisfaction. You don't find it in mood, and I think it is very important.
Happiness is determined by factors like your health, your family relationships and friendships, and above all by feeling that you are in control of how you spend your time.
If you're going to be unreligious, it's likely going to be due to reflecting on it and finding some things that are hard to believe.
You know, the standard state for people is 'mildly pleasant.' Negative emotions are quite rare, and extremely positive emotions are rare. But people are mildly pleased most of the time, they're mildly tired a lot of the time, and they wish they were somewhere else a substantial part of the time – but mostly they're mildly pleased.
People are really happier with friends than they are with their families or their spouse or their child.
I think one of the major results of the psychology of decision making is that people's attitudes and feelings about losses and gains are really not symmetric. So we really feel more pain when we lose $10,000 than we feel pleasure when we get $10,000.
Employers who violate rules of fairness are punished by reduced productivity, and merchants who follow unfair pricing policies can expect to lose sales.
My interest in well-being evolved from my interest in decision making – from raising the question of whether people know what they will want in the future and whether the things that people want for themselves will make them happy.
Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.
There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill needed to beat the market consistently, year after year.
Suppose you like someone very much. Then, by a familiar halo effect, you will also be prone to believe many good things about that person – you will be biased in their favor. Most of us like ourselves very much, and that suffices to explain self-assessments that are biased in a particular direction.
My impression is that the elimination of memories greatly reduces the value of the experience.
It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.
The effort invested in 'getting it right' should be commensurate with the importance of the decision.
We don't only tell stories when we set out to tell stories, our memory tells us stories. That is, what we get to keep from our experiences is a story.
It's clear that policymakers and economists are going to be interested in the measurement of well-being primarily as it correlates with health; they also want to know whether researchers can validate subjective responses with physiological indices.
Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.
One thing we have lost, that we had in the past, is a sense of progress, that things are getting better. There is a sense of volatility, but not of progress.
There is research on the effects of 9/11, and you know, compared to the enormity of it, it didn't have a huge effect on people's mood. They were going about their business, mostly.
It's very difficult to distinguish between what a person believes and what they say they believe.
Nobody would say, 'I'm voting for this guy because he's got the stronger chin,' but that, in fact, is partly what happens.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person – you already feel fortunate.
Economists think about what people ought to do. Psychologists watch what they actually do.
I used to hold a unitary view, in which I proposed that only experienced happiness matters, and that life satisfaction is a fallible estimate of true happiness.
Courage is willingness to take the risk once you know the odds. Optimistic overconfidence means you are taking the risk because you don't know the odds. It's a big difference.
People just hate the idea of losing. Any loss, even a small one, is just so terrible to contemplate that they compensate by buying insurance, including totally absurd policies like air travel.
In essence, the optimistic style involves taking credit for successes but little blame for failures.
After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.
Policy makers, like most people, normally feel that they already know all the psychology and all the sociology they are likely to need for their decisions. I don't think they are right, but that's the way it is.
If people do not know what is going to make them better off or give them pleasure, then the idea that you can trust people to do what will give them pleasure becomes questionable.
When people talk of the economy being strong, they don't seem to feel that they, too, are better off.
We're beautiful devices. The devices work well; we're all experts in what we do. But when the mechanism fails, those failures can tell you a lot about how the mind works.
I would not advise people to buy a car or house without making a list. You will probably improve your intuitions by making a list and then sleeping on it.
People who know math understand what other mortals understand, but other mortals do not understand them. This asymmetry gives them a presumption of superior ability.
You're surprised by something, but you don't really know what surprised you; you recognize someone, but you don't really know what cues cause you to recognize that person.
An investment said to have an 80% chance of success sounds far more attractive than one with a 20% chance of failure. The mind can't easily recognize that they are the same.